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SAN DIEGO, CA – Hempacco Co., Inc., a company specializing in the manufacturing of cigarettes, is confronting the possibility of delisting from the Nasdaq Stock Market after failing to meet the required continued listing standards.
The company, based in San Diego, California, received a notice on Monday, August 14, 2024, from Nasdaq's Listing Qualifications Department regarding its non-compliance with certain financial thresholds.
According to the notice, Hempacco does not satisfy the listing rules concerning stockholders' equity, market value of listed securities, or net income from continuing operations. The company's most recent annual report showed a stockholder deficit, which stands in contrast to the minimum required stockholder equity. In light of this, Nasdaq's hearing panel will take this issue into account when deciding on the company's future on the exchange.
Hempacco has until Wednesday, August 21, 2024, to present its plan to address the deficiency. If the company's common stock is delisted, it could have serious repercussions, including reduced liquidity and market price of the company’s common stock, a potential decrease in the number of investors, and challenges in raising equity financing.
In other recent news, Hempacco has appointed Paul Glavine and Harrison Newlands as new independent directors to its Board, bringing in valuable expertise in the biotech sector and capital markets.
In a strategic move, Hempacco has announced the acquisition of assets from Simtech LLC, MJAC Vending LLC, and Bear Air, LLC. This acquisition is expected to significantly expand its vending machine operations and product offerings. Following this, Hempacco's subsidiary, Hempbox Vending, Inc., will undergo a rebranding to become "Celebrity Vending," managing at least 100 vending machine kiosks.
InvestingPro Insights
Hempacco Co., Inc.'s financial struggles are further underlined by real-time data and analysis from InvestingPro. The company's market capitalization stands at a mere 2.88 million USD, reflecting significant market apprehension. With a negative adjusted P/E ratio of -0.31 for the last twelve months as of Q4 2023, investor sentiment remains bearish. This is compounded by a substantial revenue growth of 285.84% in Q4 2023, which, while impressive, has not translated into profitability or a stable financial position. The gross profit margin for the same period was deeply negative at -30.05%, indicating cost management issues.
InvestingPro Tips highlight several critical concerns: Hempacco operates with a significant debt burden and may have trouble making interest payments on its debt, as evidenced by its cash burn. Notably, the company's short-term obligations exceed its liquid assets, which could lead to liquidity challenges. In terms of stock performance, despite a significant return over the last week, the stock has fared poorly over the last month and has seen a substantial decline over the last year.
Investors interested in a deeper dive into Hempacco's financial health and stock performance can find additional InvestingPro Tips on the platform. As of now, there are 15 more tips available, offering a comprehensive outlook on the company's financial stability and market potential.
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